Q1 2025 Proficient Auto Logistics Inc Earnings Call

After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one one of your telephone you will then hear an automated message advising your hand. This raised to withdraw your question. Please press star one again please.

Speaker Change: Please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker today, Brad Wright Chief Financial Officer. Please go ahead.

Speaker Change: Thank you and good afternoon, everyone I'm, Brad Wright, Chief Financial Officer of proficient auto logistics. Thank you for joining us on our first quarter 2025 earnings call.

Speaker Change: Under SEC rules, our Form 10-Q, covering the three month periods ending March 31, 2025, and 24 will include financial statements for both predecessor accounting entity proficient auto transport and successor entity proficient Auto Logistics, Inc. We are not required to provide in the Form 10-Q will contain <unk>.

Speaker Change: Pro forma financial data for the combined companies.

Speaker Change: However, our earnings release provides comparative summary, combined financial information for the first quarter 2025 to the three months periods ending December 31, 2024, and March 31, 2024 for the combined companies.

Speaker Change: Our earnings release can be found under the Investor Relations section of our website at proficient auto logistics Dot com and our 10-Q when filed can also be found under the Investor Relations section of our website.

Speaker Change: During this call we will be discussing certain forward looking information. This information is based on our current expectations and it is not a guarantee of future performance I encourage you to review the cautionary statement in our earnings release, describing factors that could cause actual results to differ from those expressed by our forward looks.

Speaker Change: Statements.

Speaker Change: Further information can be found in our SEC filings. During this call. We may also refer to measures that include adjusted operating income adjusted operating ratio EBITDA and adjusted EBITDA. Please refer to the portions of our earnings release that provide reconciliations of those profitability measures to GAAP measures such.

Speaker Change: As operating earnings and earnings before income taxes.

Speaker Change: Joining me on today's call are Rick Odell proficient as chairman and Chief Executive Officer, and Amy rights, Our President and Chief operating Officer, who will provide a company update as well as an overview of the Companys combined results for the first quarter.

Speaker Change: After our prepared remarks, we'll open the call to questions. During the Q&A. Please limit yourself to one question plus one follow up you can then get back into the queue. If you have additional questions now I would like to introduce Rick O'dell, who will provide the company update.

Rick O'Dell: Thank you Brad and good afternoon, everyone I will start with an overview of our operations during the first quarter and some trends that provide insight into our expectations for future quarters. The.

Rick O'Dell: The first quarter of this year was characterized by two different portions January through mid February was a period of unusually low volume continuing weak revenue per unit and disruptive weather.

Rick O'Dell: January unit volume was up 1% versus January of 2024, our revenue for the combined group, which included Atg. This year and excluded Atg last year was lower by 17, 3% year over year.

Rick O'Dell: Through mid February.

Rick O'Dell: Through mid February when we spoke to you regarding our fourth quarter of 2024 year to date revenue was still up by approximately 17, 5% versus the fourth quarter of the prior year.

Rick O'Dell: However, you will recall that we alluded to expectations for a stronger March.

Rick O'Dell: Enabled by new contract visibility at the time that would produce a full first quarter that was essentially in line with the fourth quarter of 2024 from both a revenue and profitability standpoint.

Rick O'Dell: As you saw in our earnings release that is in fact, where we ended up with revenue adjusted operating ratio and adjusted EBITDA substantially similar to fourth quarter of 2024.

Rick O'Dell: March proved to be a strong month for deliveries with our unit volume, 17% higher than the same month of 2024 and revenue up by 11% versus March of 2024, which did not include atg.

Rick O'Dell: Industry sales were particularly strong in March with auto Saar, reaching 17 8 million units.

Rick O'Dell: Monthly Mark since April of 2021 by comparison, the National Auto Dealer Association reported SAR, a $15 6 million for January and $16 million for February most.

Most industry observers attribute the increased sales volume in March to a pull forward.

Rick O'Dell: A sales driven by the expected 25% tariffs in early April on imported automobiles announced by the current administration.

Rick O'Dell: April auto sales and deliveries started very strong on the same basis, but industry data seems to indicate a decelerating sales trend through the month of April which carried into may.

Speaker Change: <unk> services and Technology Company Cox automotive estimates that April SAR ended at approximately $16 4 million in turn we saw very strong April.

Speaker Change: So we're seeing moderation in transportation volume, especially from imported vehicles.

Speaker Change: The economic impact of tariffs on our customers and the ultimate consumer and the uncertainty of additional policy changes is meaningfully impacted the outlook for 2025 with respect to auto demand in the shifting shifting automotive supply chain.

Speaker Change: April analyst at Goldman Sachs cut their full year projected Saar to $15 4 million units.

Speaker Change: Down from $16 3 million previously.

Speaker Change: Cox automotive in Morningstar have reduced their forecast of $15 6 million and $15 5 million respectively.

Operator: This time all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Speaker Change: Morgan Stanley and global data.

Estimates that April SAR ended approximately $16 $4 million in turn we saw very strong April.

Speaker Change: We have posted bear case scenarios, a $15 million and $14 $9 million, respectively, which we hope will be avoided with recent relief on the stacking of automotive tariffs.

So we're seeing moderation in transportation volume, especially from imported vehicles.

Operator: Please be advised that today's conference is being recorded.

The economic impact of tariffs.

Speaker Change: Obviously, the strength of the consumer economy will also be a key factor.

Operator: I would now like to hand the conference over to your speaker today, Brad Wright, Chief Financial Officer. Please go ahead.

On our customers and the ultimate consumer and the uncertainty of additional policy changes as meaningfully impacted the outlook for 2025 with respect to auto demand in the shifting shifting automotive supply chain.

Speaker Change: Our OEM customers are dealing with this economic uncertainty and the prospect of significantly increased cost relative to their expectations in real time.

Brad Wright: Thank you and good afternoon everyone. I'm Brad Wright, Chief Financial Officer of Proficient Auto Logistics. Thank you for joining us on our first quarter 2025 earnings call.

During April analyst at Goldman Sachs cut their full year projected Saar to $15 4 million units.

Speaker Change: They are making decisions about where they are production occurs and whether to curtail imports.

Brad Wright: Under SEC rules, our Form 10-Q covering the three-month periods ending March 31, 2025 and 24 will include financial statements for both the predecessor accounting entity, Proficient Auto Transport, and the successor entity, Proficient Auto Logistics, Inc. We are not required to provide, and the Form 10-Q will not contain pro forma financial data for the combined companies. However, our earnings release provides comparative summary combined financial information for the first quarter 2025 to the three-month periods ending December 31, 2024 and March 31, 2024 for the combined companies. Our earnings release can be found under the Investor Relations section of our website at ProficientAutoLogistics.com.

Speaker Change: On a near term and a structural basis.

Down from $16 3 million previously.

Speaker Change: Their decisions on these critical issues will have a significant bearing on the environment that proficient will navigate over the remainder of 2025.

Cox automotive and Morningstar have reduced their forecast of $15 6 million and $15 5 million respectively.

Speaker Change: That being said, we're confident in our networks capability to assist with these changing needs.

Morgan Stanley and global data.

Speaker Change: <unk> has posted bear case scenarios, a $15 million and $14 $9 million, respectively, which we hope will be avoided with recent relief on the stacking of automotive tariffs.

Speaker Change: Even as we assess the impact of these industry headwinds proficient remained focus on our long term objectives, including continued increases in our market share and the effective integration of our merged operating companies driving improved efficiency, providing high quality service.

Speaker Change: Obviously, the strength of the consumer economy, we will also be a key factor.

Speaker Change: Our OEM customers are dealing with this economic uncertainty and the prospect of significantly increased cost.

Speaker Change: And improved profitability as.

Speaker Change: As we've reported in the past communications proficient gained significant new business. During the first quarter of this year that we expect will contribute as much as.

Speaker Change: To their expert expectations in real time they.

Brad Wright: Our 10-Q when filed can also be found under the Investor Relations section of our website.

Speaker Change: They are making decisions about where they are production occurs.

Speaker Change: $60 million to our top line on an annual basis our.

Brad Wright: During this call, we will be discussing certain forward-looking information. This information is based on our current expectations and it is not a guarantee of future performance. I encourage you to review the cautionary statement in our earnings release describing factors that could cause actual results to differ from those expressed by our forward-looking statement. Further information can be found in our SEC filings.

Speaker Change: And whether to curtail imports.

Speaker Change: On a near term and a structural basis.

Speaker Change: Our national footprint proved its value.

Speaker Change: Their decisions on these critical issues, we will have a significant bearing on the environment that proficient will navigate over the remainder of 2025.

Speaker Change: During the Onboarding of these new commitments flexing the breath of our sub haul channel and enabling the transfer of surplus revenue generating equipment and drivers to new volume without impacting existing business elsewhere in our network.

Speaker Change: That being said, we're confident in our networks capability to assist with these changing needs.

Speaker Change: Even as we assess the impact of these industry headwinds proficient remains focused on our long term objectives, including continued increases in our market share and the effective integration of our merged operating companies.

Speaker Change: In the event that overall industry demand for auto hauling services remains weak, we anticipate that there could be additional financial stress under capitalized industry participants.

Brad Wright: During this call, we may also refer to measures that include adjusted operating income, adjusted operating ratio, EBITDA, and adjusted EBITDA. Please refer to the portions of our earnings release that provide reconciliations of those profitability measures to gap measures, such as operating earnings and earnings before income tax.

Speaker Change: Proficient will trip will protect its strong balance sheet position and focus on efficiently service, serving customers and we will capitalize on market share opportunities as they're presented.

Speaker Change: Driving improved efficiency, providing high quality service.

Speaker Change: And improved profitability.

Speaker Change: As we've reported in the past communications proficient gained significant new business. During the first quarter of this year that we expect will contribute as much as.

Brad Wright: Joining me on today's call are Rick O'Dell, Proficient's Chairman and Chief Executive Officer, and Amy Rice, our President and Chief Operating Officer.

Speaker Change: We were also pleased to announce the closing of the acquisition of brothers Auto Transport April one.

Speaker Change: At $60 million to our top line on an annual basis our.

Speaker Change: This strategic addition increases our presence and density in the northeast and mid Atlantic regions, and provide new load sharing opportunities and other efficiencies to our existing operations.

Brad Wright: We'll provide a company update as well as an overview of the company's combined results for the first quarter.

Speaker Change: Our national footprint proved its value.

Speaker Change: During the Onboarding of these new commitments flexing the breath of our sub haul channel and enabling the transfer of surplus revenue generating equipment and drivers.

Brad Wright: After our prepared remarks, we'll open the call to questions. During the Q&A, please limit yourself to one question plus one follow-up. You can then get back into the queue if you have additional questions.

Speaker Change: The introduction of brothers operations has gone smoothly with seamless service for our new customers there and the integration effort is moving much more quickly than prior acquisitions.

Speaker Change: New volume without impacting existing business elsewhere in our network.

Rick O'Dell: Now, I'd like to introduce Rick O'Dell, who will provide the company update. Thank you, Brad. And good afternoon, everyone. I'll start with an overview of our operations during the first quarter and some trends that provide insight into our expectations for future quarters. The first quarter of this year was characterized by two different portions. January through mid-February was a period of unusually low volume, continuing weak revenue per unit, and disruptive weather. January unit volume was up 1% versus January of 2024. The revenue for the combined group, which included ATG this year and excluded ATG last year, was lower by 17.3% year over year.

Speaker Change: In the event that overall industry demand for auto hauling services remains weak, we anticipate that there could be additional financial stress under capitalized industry participants.

Speaker Change: As we have solidified systems process and structure and our organization.

Speaker Change: In addition to our previously merged six companies being on the common transportation management system.

Speaker Change: <unk> will trip will protect its strong balance sheet position and focus on efficiently service, serving customers and we'll capitalize on market share opportunities as they're presented.

Speaker Change: <unk> auto transport will be converted to this technology during the second quarter.

Speaker Change: All companies, including brothers will be using our common accounting and reporting system by July one as well.

Speaker Change: We were also pleased to announce the closing of the acquisition of brothers Auto transport.

Speaker Change: I'll now turn it over to Brad to cover some key financial highlights.

Speaker Change: One <unk>.

Speaker Change: This strategic addition increases our presence and density in the northeast and mid Atlantic regions, and provide new load sharing opportunities and other efficiencies to our existing operations.

Brad Wright: Thank you Rick I'll start with a few summary statistics all prior year comparisons are for the combined companies, which did not include atg in Q1, but did include Atg in Q4 fourth quarter 2020 for amounts reflect final audited results.

Rick O'Dell: Through mid-February, when we spoke to you regarding our fourth quarter of 2024, year-to-date revenue was still off by approximately 17.5% versus the fourth quarter of the prior year. However, you will recall that we alluded to expectations for a stronger March. enabled by new contract visibility at the time that would produce a full first quarter that was essentially in line with the fourth quarter of 2024 from both the revenue and profitability standpoint. As you saw in our earnings release, that is, in fact, where we ended up with revenue, adjusted operating ratio, and adjusted divot debt substantially similar to fourth quarter of 2024.

Speaker Change: The introduction of brothers operations has gone smoothly with seamless service for our new customers there and the integration effort is moving much more quickly than prior acquisitions as.

Brad Wright: Operating revenue of $95 2 million in the quarter was up 1% from last quarter, but down less than 1% from the prior year.

Speaker Change: As we have solidified systems process and structure and our organization.

Brad Wright: <unk> delivered a 494509 represented a 5% decrease compared to last quarter and a 21% increase from the first quarter of 2024.

Speaker Change: In addition to our previously merged six companies being on a common transportation management system.

Speaker Change: <unk> auto transport will be converted to this technology during the second quarter.

Brad Wright: Revenue per unit, excluding fuel surcharge was approximately $177 up approximately 5% from the previous quarter, but down approximately 9% from Q1 2024.

Speaker Change: All companies, including brothers will be using our common accounting and reporting system by July one as well.

Speaker Change: I'll now turn it over to Brad to cover some key financial highlights.

Brad Wright: Company delivers deliveries were 35% of revenue in the quarter unchanged from Q4, therefore sub haul deliveries were 65% of revenue. This quarter also unchanged from the prior quarter.

Brad: Thank you Rick I'll start with a few summary statistics operate your comparisons are for the combined companies, which did not include atg in Q1, but did include Atg in Q4 fourth quarter of 2020 for amounts reflect final audited results.

Rick O'Dell: March proved to be a strong month for deliveries with our unit volume 17% higher than the same month of 2024 and revenue up by 11% versus March of 2024 which did not include ATG. Industry sales were particularly strong in March with AutoSAR reaching 17.8 million units, the highest monthly mark since April of 2021. By comparison, the National Auto Dealers Association reported SAR of 15.6 million for January and 16 million for February. Most industry observers attribute the increased sales volume in March to a pull forward of sales driven by the expected 25% tariff in early April on imported automobiles announced by the current administration.

Brad Wright: Our OEM contract business generated approximately 91% of total transportation revenue continuing to trend in place through the second half of 2024.

Brad: Operating revenue of $95 2 million in the quarter was up 1% from last quarter, but down less than 1% from the prior year.

Brad Wright: Our dedicated fleet service generated revenue of $4 3 million during the first quarter up from $3 4 million in the fourth quarter of 2024, but down by 33% from $6 4 million in the first quarter of 2024.

Brad: <unk> delivered a 494509 represented a 5% decrease compared to last quarter and a 21% increase from the first quarter of 2024.

Brad: Revenue per unit, excluding fuel surcharge was approximately $177 up approximately 5% from the previous quarter, but down approximately 9% from Q1 2024.

Brad Wright: We continue to expect that the dedicated fleet business will contribute between four and $5 million of revenue per quarter in 2025.

Brad Wright: Our revenue from spot opportunities during the quarter comprised four 3% of total revenue at approximately $3 $7 million.

Brad: Company delivers deliveries were 35% of revenue in the quarter unchanged from Q4, therefore sub haul deliveries were 65% of revenue. This quarter also unchanged from the prior quarter.

Rick O'Dell: April auto sales and delivery started very strong on the same basis. But industry data seems to indicate a decelerating sales trend through the month of April, which carried into May. Automotive services and technology company Cox Automotive estimates that April SAR ended at approximately $16.4 million. In turn, we saw a very strong April. So we're seeing moderation in transportation volume, especially from imported vehicles. The economic impact of tariffs, both on our customers and the ultimate consumer, and the uncertainty of additional policy changes, has meaningfully impacted the outlook for 2025 with respect to auto demand and the shifting automotive supply chain.

Brad Wright: Changed from the fourth quarter of 2024, but down from $13 $8 million in the first quarter of last year.

Brad: Our OEM contract business generated approximately 91% of total transportation revenue continuing to trend in place through the second half of 2024.

Brad Wright: The average revenue per unit premium for spot buy during the quarter was approximately 25% to 30%.

Brad Wright: The modest increase in the proportion of revenue from company deliveries is consistent with communicated expectation. Likewise. The addition of brothers auto transport in the second quarter will facilitate higher company deliveries as their business is heavily skewed to company of deliveries at approximately 90%.

Brad: Our dedicated fleet service generated revenue of $4 3 million during the first quarter up from $3 4 million in the fourth quarter of 2024, but down by 33% from $6 4 million in the first quarter of 2024.

Brad: We continue to expect that the dedicated fleet business will contribute between four and $5 million of revenue per quarter in 2025.

Brad Wright: The company had approximately $10 $9 million in cash and equivalents on March 31, 2025 aggregate debt balance at quarter end to approximately $79 2 million for net debt of $68 3 million.

Brad: Our revenue from spot opportunities during the quarter comprised four 3% of total revenue at approximately $3 $7 million.

Rick O'Dell: During April, analysts at Goldman Sachs cut their full year projected SAR to 15.4 million units, down from 16.3 million previously. Cox Automotive and Morningstar have reduced their forecast to $15.6 million and $15.5 million, respectively. Morgan Stanley, and Global Data. have posted fair case scenarios of $15 million and $14.9 million, respectively, which we hope will be avoided with recent relief on the stacking of automotive tariffs. Obviously, the strength of the consumer economy will also be a key factor. Our OEM customers are dealing with this economic uncertainty and the prospect of significantly increased costs relative to their expectations in real time.

Brad Wright: Our capex spend on revenue generating equipment during 2025 will depend heavily on market conditions are.

Brad: Change from the fourth quarter of 2024, but down from $13 $8 million in the first quarter of last year.

Brad Wright: Our current expectation is for approximately $15 million of Capex for the full year. However, this amount could increase if pending bids on new business result in increased requirements later in the year.

Brad: The average revenue per unit premium for spot buy during the quarter was approximately 25% to 30%.

Brad: The modest increase in the proportion of revenue from company deliveries is consistent with communicated expectation. Likewise. The addition of brothers auto transport in the second quarter will facilitate higher company deliveries as their business is heavily skewed to company deliveries at approximately 90%.

Brad Wright: Total common shares outstanding ended the quarter at $27 million essentially unchanged from December 31, 2024.

Rick O'Dell: Looking to the second quarter the market strength in March that Rick described earlier continued through much of April before starting to subside.

Brad: The company had approximately $10 $9 million in cash and equivalents on March 31, 2025 aggregate debt balance at quarter end were approximately $79 2 million for net debt of $68 3 million.

Rick O'Dell: Despite the impact of tariffs on imported volume and slowing sales, we're projecting sequential quarter growth in total revenue in the high single digits for the quarter ending in June.

Rick O'Dell: They're making decisions about where their production occurs and whether to curtail imports, both on a near-term and a structural basis. Their decisions on these critical issues will have a significant bearing on the environment that Proficient will navigate over the remainder of 2025. That being said, we're confident in our network's capability to assist with these changing needs. Even as we assess the impact of these industry headwinds, Proficient remains focused on our long term objectives, including continued increases in our market share, and the effective integration of our merged operating companies, driving improved efficiency, providing high quality service.

Rick O'Dell: Expected revenue levels for Q2 above fixed cost coverage, we also expect improved profitability.

Brad: Our capex spend on revenue generating equipment during 2025 will depend heavily on market conditions are.

Rick O'Dell: We will be closely monitoring the steps taken by our OEM customer base over the coming months to gain better visibility beyond the current quarter. At this time, we continue to expect the full year performance to outpace 2024, while initial expectations for 2025 include included an improving market as we moved into the.

Brad: Our current expectation is for approximately $15 million of Capex for the full year. However, this amount could increase if pending bids on new business result in increased requirements later in the year.

Brad: Total common shares outstanding ended the quarter at $27 million essentially unchanged from December 31, 2024.

Rick O'Dell: Second quarter and beyond as well as gains in market share our current expectations for the year rely more heavily on market share gains and the addition of brothers to offset the weaker market in the achievement of year over year gains.

Brad: Looking to the second quarter the market strength in March that Rick described earlier continued through much of April before starting to subside.

Brad: Despite the impact of tariffs on imported volume and slowing sales, we're projecting sequential quarter growth in total revenue in the high single digits for the quarter ending in June.

Rick O'Dell: Nonetheless, we continue to see a path to profitable performance and well advanced strategic imperatives to position proficient as an industry leader.

Rick O'Dell: and improve profitability. As we've reported in the past communications, Proficient gained significant new business during the first quarter of this year that we expect will contribute as much at $60 million to our top line on an annual basis. Our national footprint proved its value. During the onboarding of these new commitments, flexing the breadth of our subhaul channel and enabling the transfer of surplus revenue generating equipment and drivers to new volume without impacting existing business elsewhere in our network. In the event that overall industry demand for auto hauling services remains weak, we anticipate that there could be additional financial stress on undercapitalized industry participants.

Speaker Change: Operator, we will now take questions.

Brad: Our expected revenue levels for Q2 above fixed cost coverage, we also expect to improve profitability.

Speaker Change: Thank you as a reminder to ask a question. Please press star one wondering your telephone and wait for your name to be announced.

Brad: We will be closely monitoring the steps taken by our OEM customer base over the coming months to gain better visibility beyond the current quarter. At this time, we continue to expect the full year performance to outpace 2024, while initial expectations for 2025 include included an improving market as we moved into the.

Speaker Change: Your question. Please press star one again.

Speaker Change: Could you please limit yourself to one question and one follow up.

Speaker Change: Our first question comes from the line of Bruce Chan with Stifel. Your line is now open.

Speaker Change: Hi, good afternoon, Rick Amy or Brad.

Speaker Change: Probably the.

Brad: Second quarter and beyond as well as gains in market share our current expectations for the year relying more heavily on market share gains and the addition of brothers to offset a weaker market in the achievement of year over year gains.

Speaker Change: One of the year.

Speaker Change: There's been a lot of change to the market.

Speaker Change: In the past.

Speaker Change: I'm wondering.

Speaker Change: Fair to say that pricing has softened and demand has softened a bit.

Rick O'Dell: Proficient will protect its strong balance sheet position and focus on efficiently serving customers and will capitalize on market share opportunities as they are presented.

Speaker Change: Consolidation is certainly happened faster than expected and you still have a lot of big opportunities for market share growth you've executed on the integration and you've got two more deals under your belt. I guess my question is if you think about all of those puts and takes.

Brad: Nonetheless, we continue to see a path to profitable performance and well advanced strategic imperatives to position proficient as an industry leader.

Rick O'Dell: We were also pleased to announce the closing of the acquisition of Brothers Auto Transport on April 1st. This strategic addition increases our presence and density in the Northeast and Mid-Atlantic regions and provides new load-sharing opportunities and other efficiencies to our existing operations. The introduction of Brothers Operations has gone smoothly, with seamless service for our new customers there, and the integration effort is moving much more quickly than prior acquisitions, as we have solidified systems, process, and structure in our organization. In addition to our previously merged six companies being on the common transportation management system, Brothers Auto Transport will be converted to this technology during the second quarter.

Brad: Operator, we will now take questions.

Brad: Thank you as a reminder to ask a question. Please press star one wanting your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, we ask.

Speaker Change: Where this business can.

Speaker Change: Achieve call it $1 or more in earnings power next year, yes.

Speaker Change: Sorry.

Speaker Change: Could you please limit yourself to one question and one follow up.

Speaker Change: $8 million or slightly below $60 million or do we need it.

Speaker Change: Our first question comes from the line of Bruce Chan with Stifel. Your line is now open.

Speaker Change: Higher than that.

Speaker Change: Tim.

Speaker Change: Thanks, Brian.

Speaker Change: Hi, good afternoon, Rick Amy or Brad.

Speaker Change: Yes, I think.

Speaker Change: Obviously the outlook for this year is it's pretty uncertain with all the dynamics in the marketplace.

Speaker Change: Probably the.

Speaker Change: Hey man of the year.

Speaker Change: There's been a lot of change to the market.

Speaker Change: Past.

Speaker Change: But I guess I would say we're extremely encouraged.

Speaker Change: I'm wondering.

Speaker Change: So fair to say that pricing has softened and demand has softened a bit.

Speaker Change: Obviously, there was some pre buy in the recent market ahead of the tariffs.

Speaker Change: Consolidation is certainly happened faster than expected and you still have a lot of big opportunities for market share growth you've executed on the integration and you have got two more deals under your belt.

Speaker Change: But we had record revenue in April.

Rick O'Dell: All companies, including Brothers, will be using our common accounting and reporting system by July 1st as well.

Speaker Change: And.

Speaker Change: I don't think you can do that in the current market. If you sort of just annualize.

Speaker Change: My question is if you think about all of those puts and takes.

Brad Wright: I'll now turn it over to Brad to cover some key financial highlights. Thank you, Rick. I'll start with a few summary statistics. All prior year comparisons are for the combined companies, which did not include ATG in Q1, but did include ATG in Q4. Fourth quarter 2024 amounts reflect final audited results. Operating revenue of $95.2 million in the quarter was up 1% from last quarter, but down less than 1% from the prior year. Units delivered of 494,509 represented a 5% decrease compared to last quarter and a 21% increase from the first quarter of 2024. Revenue per unit excluding fuel surcharge was approximately $177, up approximately 5% from the previous quarter, but down approximately 9% from Q1 2024.

Speaker Change: What that revenue level would be.

Speaker Change: Where this business can achieve call it.

Speaker Change: Would expect to operate materially better than our kind of current breakeven type level.

Speaker Change: More on earnings power next year.

Speaker Change: As you saw in <unk>.

Speaker Change: Around $1 million or slightly below $60 million or do we need it.

Speaker Change: More than 90 type operating ratio at a normalized environment.

Speaker Change: Higher than that.

Speaker Change: Okay.

Speaker Change: Chip kind.

Speaker Change: Kind of earnings.

Speaker Change: That's helpful. And then maybe just a follow up looking for some insights into customer behavior and you talked about.

Speaker Change: Yes, I think.

Speaker Change: Obviously the outlook for this year is it's pretty uncertain with all the dynamics in the marketplace.

Speaker Change: The response to what's obviously been a very dynamic tariff environment.

Speaker Change: But I guess I would say we're extremely encouraged.

Speaker Change: We've also had some material changes on the competitive front.

Speaker Change: Obviously, there was some pre buy in the recent market ahead of the tariffs.

Speaker Change: Are you hearing anything in terms of potential restocking once we sort of get past this air pocket, our customers pulling bids forward or delaying tenders.

Speaker Change: But we had record revenue in April.

Speaker Change: And.

Speaker Change: In terms of.

Speaker Change: I don't think you can do that in the current market. If you sort of just annualize.

Speaker Change: <unk> rates on contracts.

Speaker Change: Sure.

Speaker Change: What that revenue level would be.

Brad Wright: Company deliveries were 35% of revenue in the quarter, unchanged from Q4. Therefore, subhaul deliveries were 65% of revenue this quarter, also unchanged from the prior quarter. Our OEM contract business generated approximately 91% of total transportation revenue, continuing a trend in place through the second half of 2024. Our dedicated fleet service generated revenue of $4.3 million during the first quarter, up from $3.4 million in the fourth quarter of 2024, but down by 33% from $6.4 million in the first quarter of 2024. We continue to expect that the dedicated fleet business will contribute between $4 and $5 million of revenue per quarter in 2025.

Speaker Change: Points there so on the current landscape Oems are taking a variety.

Speaker Change: We would expect to operate materially better than our kind of current breakeven type level.

Speaker Change: Of actions or Inactions.

Speaker Change: More than 90 type operating ratio in a normalized environment.

Speaker Change: Well for example.

Speaker Change: Certain quarters have just continue business as usual.

Speaker Change: Okay.

Speaker Change: That's helpful and then maybe just for the follow up.

Speaker Change: Or that the landscape for Carrefour will become clearer and time and they will continue to adjust in real time.

Speaker Change: For some insights into customer behavior, and you talked about the <unk>.

Speaker Change: Sponsorship, what's obviously been a very dynamic tariff environment.

Speaker Change: Others have chosen to hold cars in the hopes of getting.

Speaker Change: We've also had some material changes on the competitive front.

Better information on which to make decisions and therefore, they stopped the flow of Aircard if not entirely.

Speaker Change: Yes.

Speaker Change: Are you hearing anything in terms of potential restocking once we sort of get past this air pocket.

Speaker Change: Danny leaves allative till what would be considered normal.

Speaker Change: Immersion bids forward or delaying tenders and whats being in terms of.

Speaker Change: And then a little bit of pull forward activity trying to get ahead of the tariffs, but as you know they came on relatively quickly and its difficult to shift a lot of production volume very quickly though.

Speaker Change: Renewal rates on our contracts.

Brad Wright: Our revenue from spot opportunities during the quarter comprised 4.3% of total revenue at approximately $3.7 million. Unchanged from the fourth quarter of 2024, but down from $13.8 million in the first quarter of last year. The average revenue per unit premium for spot by during the quarter was approximately 25 to 30 percent. The modest increase in the proportion of revenue from company deliveries is consistent with communicated expectation. Likewise, the addition of Brothers Auto Transport in the second quarter will facilitate higher company deliveries as their business is heavily skewed to company deliveries at approximately 90%. The company had approximately $10.9 million in cash and equivalents on March 31st, 2025.

Speaker Change: Sure.

Speaker Change: A few points there so.

Speaker Change: On the current landscape.

Speaker Change: Yes are taking in variety.

Speaker Change: A little bit of pull forward I would not say that that was significant and the transportation plus.

Speaker Change: Of actions or Inactions.

Speaker Change: For example.

Speaker Change: Certain quarters have just continue business as usual and figure that the landscape for Cara.

Speaker Change: What happens from here.

Speaker Change: I'll be the decisions around mix between domestic production and what continues to be imported which model have the economic characteristics.

Speaker Change: He kind of clear in time, and they will continue to adjust in real time.

Speaker Change: Others have chosen to hold cars in the hopes of getting.

Speaker Change: To participate in the domestic market.

Speaker Change: How retail pricing plays out.

Speaker Change: Better information on which to make decisions and therefore this stock.

Speaker Change: Perfect tariff environment and a lot of that.

Speaker Change: Of their cars.

Speaker Change: Entirely.

Speaker Change: Second part of your question was around pricing when you all and you alluded to this in your earlier question.

Speaker Change: Substantially relative.

Speaker Change: What would be considered normal.

Speaker Change: And then a little bit of pull forward activity trying to get ahead of the tariff but.

Brad Wright: Aggregate debt balance, a quarter end to approximately $79.2 million for net debt of $68.3 million. Our CapEx spend on revenue generating equipment during 2025 will depend heavily on market conditions. Our current expectation is for approximately 15 million of CapEx for the full year. However, this amount could increase if pending bids on new business result in increased requirements later in the year. Total common share is outstanding, ended the quarter at $27 million, essentially unchanged from December 31st, 2024. Looking to the second quarter, the market strength in March that Rick described earlier continued through much of April before starting to subside.

Speaker Change: Market is relatively weak for pricing power.

Speaker Change: The Oems are under significant cost pressure and are looking for some relief on cost in their supply chain from any source that they can find at PDL.

Speaker Change: They came on relatively quickly.

Speaker Change: Difficult to shift a lot of production volume.

Speaker Change: A little bit of pull forward I would not say that that was significant in the transportation side.

Speaker Change: To the extent that those bids are taking place at the current moment.

Speaker Change: What happens from here.

Speaker Change: It's a little more challenging.

Speaker Change: We'll be the decisions around mix between domestic production and what continues to be imported which model.

Speaker Change: Pushed the value proposition.

Speaker Change: Relative to the price lever, we've got to balance those carefully.

Speaker Change: The economic characteristics to continue to participate in the domestic market.

Speaker Change: Yeah.

Speaker Change: Okay, Great I'll hop back in queue for the rest I appreciate it.

Speaker Change: Thank you. Our next question comes from the line of Tyler Brown with Raymond James Your line is now open.

Speaker Change: And how retail pricing plays out.

Speaker Change: Post tariff environment.

Speaker Change: And a lot of that.

Tyler Brown: Hey, good afternoon.

Speaker Change: Second part of your question was around pricing when you all and you alluded to this in your earlier question.

Speaker Change: Good afternoon Tyler.

Brad Wright: Despite the impact of tariffs on imported volume and slowing sales, we are projecting sequential quarter growth in total revenue in the high single digits for the quarter ending in June. At expected revenue levels for Q2, above fixed cost coverage, we also expect improved profitability. We will be closely monitoring the steps taken by our OEM customer base over the coming months to gain better visibility beyond the current quarter. At this time, we continue to expect the full year performance to outpace 2024.

Tyler Brown: Hey, Amy.

Tyler Brown: I don't know if this is the right question I'm going to ask it anyway. So.

Tyler Brown: What is your mix between domestically produced autos say moving out of the domestic OEM and basically an imported then.

Speaker Change: That market is relatively weak for pricing power.

Speaker Change: The Oems are under significant cost pressure and are looking for some relief on cost in their supply chain from any source that they can find it.

Tyler Brown: Maybe being moved out of Singapore.

Speaker Change: To the extent that those bids.

Speaker Change: Theyre taking place at the current moment.

Tyler Brown: We would estimate that we are roughly 60% of the mantech, 40% imported.

Speaker Change: It's a little more challenging.

Speaker Change: Pushed the value proposition.

Tyler Brown: Some of that imported volume.

Brad Wright: While initial expectations for 2025 included an improving market as we moved into the second quarter and beyond, as well as gains in market share, our current expectations for the year rely more heavily on market share gains and the addition of brothers to offset a weaker market in the achievement of year-over-year gains.

Speaker Change: Relative to the price lever, we've got to balance carefully.

Tyler Brown: Take directly from port locations and some of it rail inland and then we take it from a rail hubs with ultimate destination. So there is a little bit of a blurring of those base load, but we think we are predominantly.

Speaker Change: Okay, Great I'll hop back in queue for the rest I appreciate it.

Operator: Thank you. Our next question comes from the line of Tyler Brown with Raymond James Your line is now open.

Tyler Brown: The Magnum with probably 30 to 40 per cent for Todd.

Tyler Brown: Hey, good afternoon.

Speaker Change: Good afternoon Tyler.

Tyler Brown: Okay.

Operator: Hey, Amy.

Speaker Change: Very helpful that helps reshape that okay.

Brad Wright: Nonetheless, we continue to see a path to profitable performance and will advance strategic imperatives to position Proficient as an industry leader.

Operator: I don't know if this is the right question I'm going to ask it anyway. So.

Tyler Brown: I would tell her that.

Tyler Brown: Good morning.

Operator: What is your mix between domestically produced autos say moving out of the domestic OEM and basically an imported then that's it.

Tyler Brown: Regional flavor to that of course.

Tyler Brown: East and West had a heavier.

Operator: Operator will now take questions. Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit yourself to one question and one follow-up.

Tyler Brown: Heavier component of that the import share of just being in the park location right.

Tyler Brown: Right right makes sense, Okay, Brad a couple of.

Operator: Maybe being moved out of Singapore.

Speaker Change: Maybe housekeeping items are really a couple of things you can help us with so just roughly how much does brothers do annually in revenue.

Operator: We would estimate that we are roughly 60% of America, 40% imported.

Bruce Chan: Our first question comes from the line of Bruce Chan with Stiefel. Your line is now open. Good afternoon, Rick, Amy, and Brad. Probably the statement of the year that there's been a lot of change to the market, you know, over the past year. Wondering if it's fair to say that, you know, pricing is softened and demand is softened a bit. But, you know, consolidation has certainly happened faster than expected. And you still have a lot of big opportunities for market share growth. You know, you've executed on the integration and you've got two more deals under your belt.

Operator: Some of that imported volume.

Operator: Take directly from port locations and some of it rail inland and that we take it from a real estimate ultimate destination. So there is a little bit on the blurring of those space, but we think we are predominantly.

Speaker Change: Well I think you could look for that smaller than atg.

Speaker Change: But not significantly smaller recall.

Speaker Change: Maybe three quarters of it.

Speaker Change: Okay.

Operator: The matter with probably 30 to 40 per cent warhead.

Tyler Brown: I forget exactly something like $30 million does that seem a little lighter than that Tyler, okay little lighter than that okay, but in the 10-K I think you mentioned.

Speaker Change: Okay. No that's very helpful because that helps reshape that okay.

Operator: I would tell her that.

Speaker Change: Good morning.

Speaker Change: There are regional flavor to that of course.

Speaker Change: Typically that the cessation of one of your large customers.

Speaker Change: East and West had a heavier.

Rick O'Dell: I guess, you know, my question is, if you think about all of those puts and takes, are we at a point where this business can, you know, achieve, call it, you know, a dollar or more in earnings power next year if, you know, SOX is around $16 million or slightly below $16 million? Or do we need it to get, you know, higher than that, you know, to be the center of earnings power? Yeah, I think obviously the outlook for this year is pretty uncertain with all the dynamics in the marketplace. But I guess I would say we're extremely encouraged.

Speaker Change: Heavier component of the forecast as being in the park location right.

Speaker Change: Large competitors could bump revenues by 15% and I think that's about call it $60 million of incremental revenue. One I'm curious if that has changed at all up or down and to be clear that number does not include any additional outstanding contract wins or bids and number two.

Brian: Right makes sense, Okay, Brian couple of.

Speaker Change: Maybe housekeeping items or maybe a couple of things you could help us with so just roughly how much does brothers do annually in revenue.

Speaker Change: Thank you said it was going to ramp. So can you just help us size, what that incremental revenue would be in 'twenty five and maybe if you could put those two together roughly how much incremental revenue in 'twenty five should we see from those.

Speaker Change: Well I think you could look for smaller than atg.

Speaker Change: Right, but not significantly smaller colo.

Speaker Change: Maybe three quarters of it.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: No.

Speaker Change: I forget exactly something like $30 million does that seem.

Speaker Change: $60 million figure as annualized.

Rick O'Dell: Obviously, there was some pre buy in the in the recent market ahead of the tariffs. But, you know, we had record revenue in April. And, you know, I don't think you can do that in the current market, if you sort of just annualized what that revenue level would be. We would expect to operate materially better than, you know, our kind of current break-even type level. more than 90 type operating ratio in a normalized environment. Okay, that's, that's helpful.

Speaker Change: The new business started mid first quarter, and and ramped up as we move through the quarter, So where we're getting to a normalized run rate of what would be roughly $60 million annualized.

Speaker Change: A little lighter than that seller, okay little lighter than that okay, but in the 10-K I think you mentioned specifically that the cessation of one of your large customers.

Speaker Change: The large competitors could bump revenues by 15% and I think that's about call it $60 million of incremental revenue.

Speaker Change: And then in terms of other market share gains there there remains potential for us to win incremental business as we continue moving through the year.

Speaker Change: I'm curious if that has changed at all up or down and to be clear that number does not include any additional outstanding contract wins or bids and number two I think you said it was going to ramp. So can you just help us.

Speaker Change: And we've been in the process of sharing with the market net new gains on a quarter by quarter basis.

Rick O'Dell: And then maybe just for the follow up, looking for some insights into customer behavior, you know, you talked about, you know, the response to what's obviously been a very dynamic tariff environment. We've also had some material changes on the competitive front.

Speaker Change: Okay. That's helpful. And then my last one just real quick Brad on the Q2 commentary I think you said high single digit sequential move in revenue would EBITDA be pretty similar should we think it is slightly better or slightly worse than high single digits. Just any color there would be helpful. Thank you.

Speaker Change: Size, what that incremental revenue would be in 'twenty, five and maybe if you could put those two together roughly how much incremental revenue and 25 should we see from those.

Speaker Change: So the $60 million figure is annualized.

Rick O'Dell: Are you hearing any in terms of potential restocking once we sort of get past this air our customers, you know, pulling bids forward or delaying, you know, tenders? And, you know, what being in terms of renewal rates on contract? Sure, a few points there. So, on the current landscape, you know, OEMs are taking a variety of actions or inactions. So, for example, Certain importers have just continued business as usual and figure that the landscape for tariffs, you know, will become clearer in time and they will continue to adjust in real time as that occurs. Others have chosen to hold cars in the hopes of getting, you know, better information on which to make decisions and therefore they've stopped the flow of their cars.

Speaker Change: The new business started mid first quarter and and ramp up as we moved through the quarter.

Speaker Change: Yes, so I think what what you would see at that level of revenue is improvement at the adjusted or line, which would carry down to EBITDA to Tyler I mean.

Speaker Change: Where we're getting to a normalized run rate of what would be roughly $70 million annualized.

Speaker Change: Yes.

Speaker Change: Youre, probably not still too where we.

Speaker Change: And then in terms of other market share gains there, they're running potential for us to win incremental business as we continue moving through the year.

Speaker Change: We intend to be but youre probably into the mid nineties at that point.

Speaker Change: I think of amended Thats helpful.

Speaker Change: Kind of a targeted.

Speaker Change: And we've been in the practice of sharing with the market net new gains on a quarter by quarter.

Speaker Change: Incremental margins would be in the 20% to 25% range.

Speaker Change: Okay, that's very helpful.

Speaker Change: Okay. That's helpful. And then my last one just real quick Brad on the Q2 commentary I think you said high single digit sequential move in revenue would EBITDA be pretty similar should we think it's slightly better or slightly worse than high single digits. Just any color there would be helpful. Thank you.

Speaker Change: That's like a good rule of thumb.

Speaker Change: I think thats right.

Speaker Change: Okay, all right cool. Thank you guys absent some outlier self insurance expense or something like that.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Ryan Merkel with William Blair. Your line is now open.

Speaker Change: Yes, so I think what what you would see at that level of revenue is improvement to be adjusted or line, which was carried down to EBITDA to Tyler.

Rick O'Dell: It's not entirely substantially relative to, you know, what would be considered normal. There has been a little bit of pull forward activity trying to get ahead of the tariff, but as you know, they came on relatively quickly and it's difficult to shift a lot of production volume very quickly. So a little bit of pull forward, I would not say that that was significant in the transportation flows. What happens from here, you know, will be the decisions around mix between domestic production and what continues to be imported, you know, which models have the economic characteristics to continue to participate in the domestic market and how retail pricing plays out in a, you know, post tariff environment.

Speaker Change: Hey, guys. This is Mike Frank on for Ryan Thanks for taking the questions.

Speaker Change: First off I'm curious so you get a little more color on the April you said it was a record record month, but can you give us sort of an idea of what growth was like in that quarter.

Speaker Change: Yes.

Speaker Change: Youre probably not.

Speaker Change: <unk> still too where we.

Speaker Change: And tend to be but youre, probably into the mid nineties at that point.

Speaker Change: And then that's it.

Speaker Change: I think a minute that's helped.

Speaker Change: Goes for Q2, what does that imply for the rest of the second quarter growth.

Speaker Change: Kind of a targeted.

Speaker Change: Incremental margins would be in the 20% to 25% range.

Speaker Change: So I think we're being.

Speaker Change: Okay, Yes, that's very helpful.

Speaker Change: A little bit conservative just given.

Speaker Change: That's like a good rule of thumb.

Speaker Change: Given the market uncertainty.

Speaker Change: That's right.

Speaker Change: And I guess, what we were kind of our current outlook would be.

Speaker Change: Okay cool, thank you guys and some outlier self insurance expense or something like that.

Speaker Change: 8%.

Speaker Change: Incremental revenue over the first quarter.

Rick O'Dell: And a lot of that is still pending. The second part of your question was around pricing renewals, and you alluded to this in your earlier question, you know, the current market is relatively weak for pricing power. The OEMs are under significant cost pressure and are looking for some relief on cost in their supply chain from any source that they can find it. So to the extent that those bids are taking place, you know, at the current moment, it's a little more challenging to push the value proposition relative to the price lever. We've got to balance those carefully.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Ryan Merkel with William Blair. Your line is now open.

Speaker Change: Got it.

Speaker Change: And then.

Speaker Change: Hey, guys. This is Mike <unk> on for Ryan Thanks for taking the questions.

Speaker Change: So I can give you a little bit of a sense there.

Speaker Change: We gave you some indication of how march compared to last year.

Speaker Change: First off I'm curious so you get a little more color into April you said it was a record record months, but can you give us sort of an idea of what growth was like in that quarter.

Speaker Change: April compared more favorably to last year than March.

Speaker Change: And then as it goes for Q2, what does that imply for the rest of the second quarter growth.

Speaker Change: Again and again.

Speaker Change: A question again from March to April even as we look on a year over year comparative basis.

Speaker Change: Okay.

Speaker Change: So I think we're being.

Speaker Change: We gave the EBIT of our pulling back right towards the end of the month ahead carrying forward here in early may.

Speaker Change: A little bit conservative just given.

Speaker Change: Given the market uncertainty.

Speaker Change: Expectations for May and June remain at a level that is lower than what we saw in April.

Speaker Change: And I guess, what we've what we're kind of our current outlook would be.

Bruce Chan: Okay, great. I'll hop back in queue for the rest. Appreciate it. Thank you.

Speaker Change: 8%.

Speaker Change: <unk>.

Speaker Change: A change are easing.

Tyler Brown: Our next question comes from the line of Tyler Brown with Raymond James. Your line is now open. Hey, good afternoon. Good afternoon, Tyler. Hey, Amy. So I don't know if this is the right question. I'm gonna ask it anyway.

Speaker Change: Incremental revenue over the first quarter.

Speaker Change: Tariff policy that might catalyze something that today is not known.

Speaker Change: Got it.

Speaker Change: Tom.

Speaker Change: Okay.

Speaker Change: And then.

Speaker Change: And then the other question from me M&A.

Speaker Change: So I can give you a little bit of a sense there I mean, we.

Finished brothers in the quarter.

Amy Rice: So What is your mix between domestically produced autos, say moving out of a domestic OEM and basically an imported VIN that's maybe being moved out of sale? We would estimate that we are roughly 60% domestic, 40% imported. Some of that imported volume we take directly from port locations and some of it rails inland and then we take it from a railhead to its ultimate destination. So there is a little bit of blurring of those great flows, but we think we are predominantly domestic with, you know, probably 30 to 40% on the import side. Nope, that's very helpful.

We gave you some indication.

Speaker Change: Should we expect there to be more sort of opportunities are with there being some uncertainty in the market is that something thats probably.

Speaker Change: How march compared to last year.

Speaker Change: April compare more favorably to last year than March.

Speaker Change: <unk> locked up for the next few quarters.

Speaker Change: Well again and again.

Speaker Change: Yes, I think we will take a cautious approach to the next step and kind of see what the market.

Speaker Change: Question on gains on March eight ball, even as they work on a year over year comparative basis.

Speaker Change: But the market dynamics are and gauge our operating performance in this.

Speaker Change: We gave the EBIT of our pulling back right towards the end of the month that has carried forward.

Speaker Change: Volatile environment before we would move forward aggressively.

Speaker Change: So our expectation for May and June.

Speaker Change: Being said, we are starting to see some distressed assets coming to market.

Speaker Change: I mean at a level that is lower than what we saw in April.

Speaker Change: <unk>.

Speaker Change: And.

Speaker Change: A change.

Speaker Change: We'll just be smart about the opportunities that we pursue and those that we would want to pass by.

Speaker Change: Easing.

Speaker Change: Tariff policy that might catalyze something that today.

Speaker Change: Yes.

Speaker Change: Alright, and so on.

Speaker Change: Good for me I'll pass it on thank you.

Speaker Change: Okay.

Amy Rice: That helps me shape that. Okay. There's a regional flavor to that, of course, you know, the east and west have a heavier component of the import shares that's being in the port location.

Speaker Change: And then the other question from me M&A.

Speaker Change: Thank you. Our next question follow up from Bruce Chan with Stifel. Your line is now open.

Speaker Change: <unk> finished brothers in the quarter.

Speaker Change: Should we expect there to be more sort of opportunities are what they are being some uncertainty in the market is that something that's probably probably locked up in the next few quarters.

Bruce Chan: Yes. Thanks for the follow up here just wanted to get a better sense of capacity maybe both in your model ended the industry.

Tyler Brown: Okay, Brad, a couple of maybe housekeeping items or maybe a couple of things you could help us with.

Speaker Change: Is there a percentage that youre kind of thinking about now for both.

Speaker Change: Yes, I think we will take a cautious approach to the next step and kind of see what the market.

Speaker Change: What is the order book for new equipment look like and maybe just to help investors understand.

Brad Wright: So just roughly, how much does Brothers do annually in revenue? Well, I think you could, you could look for, it's smaller than ATG, right, but not significantly smaller. Call it, you know, maybe three quarters of it. Okay, I forget exactly. Something like 30 million? Does that seem a little lighter than that, Tyler? little lighter than that. Okay.

Speaker Change: But the market dynamics are.

Speaker Change: If you could talk about the delivery timeline for that new equipment as well.

Speaker Change: Gage our operating performance in this.

Speaker Change: Volatile environment before we would move forward aggressively.

Speaker Change: Sure.

Speaker Change: So from a capacity perspective.

Speaker Change: That being said we are.

Speaker Change: We're starting to see some distressed assets come to market.

Speaker Change: I would say in the current market environment. Most of your players have got some slack capacity.

Speaker Change: And.

Speaker Change: Let's be smart about the opportunities that we pursue and those that we would want to pass by.

Speaker Change: Industry overall had a large player exit the space. So if automotive volumes why aren't you return in a sustainable way I think the industry would feel a crunch on capacity.

Speaker Change: Alright.

Speaker Change: Good for me I'll pass it on thank you.

Speaker Change: Thank you. Our next question follow up from Bruce Chan with Stifel. Your line is now open.

Brad Wright: But in the 10k, I think you mentioned specifically that the cessation of one of your large customers Unknown Attendee, Jizong Chan, Bradley Wright, Amy Rice, Proficient Auto Logistics And number two, I think you said it was going to ramp. So can you just help us size what that incremental revenue would be in 25? And maybe if you could put those two together, roughly how much incremental revenue in 25 should we see? Yeah, so the $60 million figure is annualized. The new business started mid first quarter and, and ramped up as we moved through the quarter.

Bruce Chan: Yes, thanks for the follow up here just.

Bruce Chan: I wanted to get a better sense of capacity maybe both in your model ended the industry.

Speaker Change: But.

Speaker Change: The current environment I think.

Speaker Change: These are.

Speaker Change: These are not overly tight just because it's a little bit of an uncertain and relatively unfavorable environment.

Bruce Chan: Is there a percentage that youre kind of thinking about now for both.

Bruce Chan: What is the order book for new equipment look like and maybe just to help investors understand.

Speaker Change: In terms of our order book on equipment.

Bruce Chan: If you could talk about the delivery timeline for that new equipment as well.

Speaker Change: Some of what some new equipment that's coming in.

Speaker Change: Relatively modest.

Bruce Chan: Sure.

Speaker Change: Absolute numbers.

Speaker Change: And we do have.

Bruce Chan: So from a capacity perspective.

Sort of a destination for that new equipment to be deployed and that's really how we're looking at.

Bruce Chan: I would say in the current market environment. Most of your players have got some slack capacity.

Speaker Change: Market for incremental new bill in the near term.

Bruce Chan: Industry overall.

So if we gain incremental business that we need additional profit to support it.

Bruce Chan: Large player exit the space.

Bruce Chan: So.

Bruce Chan: Automotive volumes why aren't you.

Speaker Change: We intend to do that.

Bruce Chan: Turn in a sustainable way I think the industry was.

Speaker Change: To the latter part of your question on delivery timelines.

Brad Wright: So we're, we're getting to a normalized run rate of what would be, you know, roughly 60 million annualized. And then in terms of other market share gains, there, you know, there remains potential for us to win incremental business as we continue moving through the year. And we've been in the practice of, of sharing with the market, you know, net new gains on a quarter by quarter basis. Okay, that's helpful.

Speaker Change: There is new equipment that is available either partially or fully built right now and the market for used equipment is also becoming more available side a day.

Bruce Chan: Anthony.

Bruce Chan: But.

Bruce Chan: The current environment I think.

Bruce Chan: These are.

Bruce Chan: Things are not overly tight just because it's a little bit of an uncertain and relatively unfavorable environment.

Speaker Change: Lightly aged equipment is starting to come to market, but theres not a scarcity or a long lead time to order new equipment at the current juncture.

Bruce Chan: In terms of.

Bruce Chan: Our order book.

Bruce Chan: You have signed up with some new equipment that's coming in.

Bruce Chan: Relatively modest.

Speaker Change: Okay.

Speaker Change: You think about the capacity from that shuttered competitor do you have a sense of how much of that comes back into serve specifically the new vehicle market.

Bruce Chan: In absolute numbers.

Brad Wright: And then my last one, just real quick, Brad, on the Q2 commentary, I think you said high single digit sequential move in revenue, would EBITDA be pretty similar, or should we think it's slightly better or slightly worse than high single digits, just any color there would be helpful. Thank you. Yeah, so I think what what you would see at that level of revenue is improvement at the adjusted OR line, which would carry down to EBITDA 2, Tyler. I mean, you know, you're probably not still to where we intend to be, but you're probably into the mid 90s at that I think in a minute, that's helpful.

Bruce Chan: And we do have.

Bruce Chan: What are the destination for that new equipment to be deployed and that's really how we're looking at the market for incremental new builds in the near term.

The fleet of the player that left the industry was not a newer fleet average.

Bruce Chan: So if we gain incremental business M&A need additional traffic reported.

Bruce Chan: We intend to do that.

Speaker Change: Average life.

Speaker Change: I'm not sure that that much of that equipment would be retained and the new vehicle market. Some of it may move downstream and either re marketed in the secondary space.

Bruce Chan: To the latter part of your question on delivery timelines.

Bruce Chan: There is equipment that is available either partially or fully built right now and the market for used equipment is also becoming more available days.

Speaker Change: I don't have specific.

Speaker Change: The numbers are estimates there for sure but that would just be my supposition.

Bruce Chan: Lightly aged.

Speaker Change: Okay. That's helpful. And then just one final quick one I know, it's a little bit speculative, but theres been some talk of.

Bruce Chan: <unk> is starting to come to market, but theres not a scarcity or.

Brad Wright: like kind of a targeted incremental margin would be in the 20 to 25% range. Okay, yeah, that's very helpful. That's like a good rule. That's like a good rule of thumb. Yeah, I think that's right.

Bruce Chan: Long lead time.

Speaker Change: Tax changes with respect to <unk>.

Bruce Chan: But our new equipment at the current juncture.

Speaker Change: Okay, and when you think about the capacity from that shuttered competitor do you have a sense of how much of that.

Speaker Change: Interest on auto payments have you had any discussions with customers about what that could mean for demand at SAR.

Bruce Chan: It comes back in to serve specifically the new vehicle market.

Unknown Attendee: Unknown Attendee, Jizong Chan, Bradley Wright, Amy Rice, Proficient Auto Logistics Thank you.

Speaker Change: We really haven't.

Speaker Change: Tariffs.

Speaker Change: And.

Speaker Change:

Speaker Change: And supply chain strategy is that we're a lot in the room for our customers right now and then I think.

Speaker Change: The fleet.

Speaker Change: The player that left the industry. It was not a newer fleet average.

Ryan Merkel: Our next question comes from the line of Ryan Merkel with William Blair. Your line is now open.

Speaker Change: Of course, they are also focused on on the incentives based on what drives and customer demand.

Speaker Change: Average life.

Speaker Change: I'm not sure that that.

Ryan Merkel: Hey guys, this is Mike Frank, this is Hunter Ryan. Thanks for taking the questions. First off, I was curious, you get a little more color into April. You said it was a record month, but can you give us sort of an idea of what growth was like in that quarter? And then as it goes for Q2, what does that imply for the rest of the second quarter growth? So I think we're being a little bit conservative, just given the market uncertainty. And I guess what we what we're kind of our current outlook would be 8% incremental revenue over the first quarter.

Speaker Change: Much of that equipment would be retained in the new vehicle market. Some of it may move downstream NGL remarketed and secondary space.

Speaker Change: I think they're canceling the biggest first.

Speaker Change: Okay, Great. That's all for me. Thank you.

Speaker Change: Thank you and I'm currently showing no further questions at this time I'd like to hand, the call back over to Rick O'dell for closing remarks.

Speaker Change: I don't have.

Speaker Change: The numbers are estimates there for sure but that would just be my supposition.

Rick O'Dell: Okay well. Thank you for your interest in <unk> logistics, we're excited about April being a record month and while it's a difficult environment, we have a high level of confidence in our ability to manage through this and are confident that also that our network is going to be helpful to the Oems as they manage through this.

Speaker Change: Okay. That's helpful. And then just one final quick one I know, it's a little bit speculative, but theres been some talk of.

Speaker Change: Tax changes with respect to.

Speaker Change: Interest on auto payments have you had any discussions with customers about what that could mean for demand in Saar.

Rick O'Dell: Dynamic environment with the potential changes.

Speaker Change: We really haven't.

Speaker Change: Tara.

Rick O'Dell: I think that could result.

Speaker Change: Production and supply chain strategy is that we're reliant in the room or on contract.

Rick O'Dell: From from some of the changes to their supply chain.

Speaker Change: And then I think.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Of course, they're all very focused on on the incentives based on what drives and customer demand.

Ryan Merkel: Cup.

Ryan Merkel: And then So I can give you a little bit of a sense there. I mean, we, we gave you some indication of how March compared to last year. April compared more favorably to last year than March. So again, we did see a sequential gain from March to April, even as we look on a year-over-year comparative basis. We did, though, see a bit of a pulling back right towards the end of the month that has carried forward here into early May. So our expectations for May and June remain at a level that is lower than what we saw in April, absent, you know, a change or, you know, easing in, in tariff policy that might catalyze something that today is Okay.

Speaker Change: I think they're tackling that I guess first.

Speaker Change: Okay, Great. That's all for me. Thank you.

Speaker Change: Thank you and I'm currently showing no further questions at this time I'd like to hand, the call back over to Rick O'dell for closing remarks.

Rick O'Dell: Okay well. Thank you for your interest in <unk> logistics, we're excited about April being a record month and while it's a difficult environment, we have a high level of confidence in our ability to manage through this and are confident that also that our network is going to be helpful to the Oems as they manage through this.

Rick O'Dell: Dynamic environment with the potential changes that could result.

Rick O'Dell: From from some of the changes to their supply chain.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.

Rick O'Dell: Yeah.

Ryan Merkel: Another question for me, M&A, Finnish Brothers in the quarter. Should we expect there to be more sort of opportunities or with there being some uncertainty in the market? Is that something that's probably probably locked up in the next few quarters? Yeah, I think we'll take a cautious approach to the next step and kind of see what the market, what the market dynamics are, and, you know, gauge our operating performance in this, you know, volatile environment before we move forward aggressively. That being said, you know, we are starting to see some distressed assets come to market.

Rick O'Dell: [music].

Ryan Merkel: And we'll just be smart about the opportunities that we pursue and those that we would want to pass by.

Ryan Merkel: Alright, it's all good for me. I'll pass it on.

Operator: Thank you.

Bruce Chan: Our next question is a follow-up from Bruce Chan with Stifel. Your line is now open. Yeah, thanks for the follow up here. Just wanted to get a better sense of capacity, maybe both in your model and in the industry. You know, is there a percentage that you're kind of thinking about now for both? And what is the order book for new equipment look like? And maybe just, you know, to help investors understand, if you could talk about the delivery timeline for that, you know, new equipment as well.

Rick O'Dell: Sure. So from a capacity perspective I would say in the current market environment, most of your players have got some flat capacity, but the industry overall, had a large player exit the space. So if automotive volumes were to, you know, return in a sustainable way, I think the industry would feel a crunch on capacity. But in in the current environment, I think, you know, things are things are not overly tight, just because it's a little bit of an uncertain and relatively unfavorable environment. In terms of our order book on equipment, we do have some equipment, some new equipment that's coming in, relatively modest in absolute numbers.

Rick O'Dell: And we do have, you know, sort of a destination for that new equipment to be deployed. And that's really how we're looking at the market for incremental new builds in the near term. So if we gain incremental business, and we need additional trucks to support it, you know, we intend to do that. To the latter part of your question on delivery timelines, there is new equipment that is available either partially or fully built right now. And the market for used equipment is also becoming more available. So I would say likely aged use equipment is starting to come to market, but there's not a scarcity or a long lead time to order new equipment at the current juncture.

Amy Rice: Okay, Amy, when you think about the capacity from that shuttered competitor, do you have a sense of how much of that comes back in to serve, you know, specifically the new vehicle market? The fleet of the player that left the industry was not a newer fleet in its average life. And so I'm not sure that that much of that equipment would be retained in the new vehicle market. Some of it may move downstream into the remarketed and secondary space. I don't have, you know, specific numbers or estimates there to share, but that would just be my supposition.

Rick O'Dell: Great.

Rick O'Dell: Yes.

Amy Rice: Okay, that's helpful.

Amy Rice: And then just one final quick one. I know it's a little bit speculative, but there's been some talk of, you know, tax changes with respect to, you know, interest on auto payments. Have you had any discussion with customers about, you know, what that could mean for, you know, demand and SAR? We really haven't. I mean, tariffs and production and supply chain strategy is the gorilla in the room for our customers right now. And then I think, you know, of course, they are also focused on on the incentives based on what drives and customer demand, but I think they're tackling the biggest first.

Rick O'Dell: [music].

Amy Rice: Okay, great.

Amy Rice: That's all for me. Thank you.

Operator: Thank you and I'm currently showing no further questions at this time.

Rick O'Dell: I'd like to hand the call back over to Rick O'Dell for closing remarks. Okay, well, thank you for your interest in Proficient Auto Logistics. We're excited about April being a record month.

And while it's a difficult environment, we have a high level of confidence in our ability to manage through this and are confident that also that our network is going to be helpful to the OEMs as they manage through this dynamic environment with the potential changes of routing that could result, you know, from some of the changes to their supply This concludes today's conference call. Thank you for your participation. You may now disconnect.

Rick O'Dell: Okay.

Rick O'Dell: [music].

Sure.

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Rick O'Dell: Yes.

Rick O'Dell: Yes.

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Rick O'Dell: Yes.

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Rick O'Dell: [music].

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Rick O'Dell: Okay.

Rick O'Dell: Okay.

Rick O'Dell: [music].

Rick O'Dell: Thank you.

Rick O'Dell: Sure.

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Rick O'Dell: Yes.

Rick O'Dell: Okay.

Rick O'Dell: Okay.

Rick O'Dell: Sure.

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Rick O'Dell: Yes.

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Rick O'Dell: Okay.

Rick O'Dell: [music].

Rick O'Dell: Sure.

Rick O'Dell: [music].